Inflating property price to beat LTV restriction?

[Ringo33]

Assuming you have only $200K, you want to buy a $1m investment property, buy can only borrow $500k due to LTV.

Possible solution is that you get the seller to inflate the price to $1.6m so that you can borrow $800,000K from the bank. In return, you take up a short term loan to make round trip of $200K + $600K (short term loan) through the buyer and then you retire the loan.

Disadvantage is of course you need to pay higher stamp duty, but the advantage is that you could now own a property.

The above is just a simplified example for discussion sake.

[Arcachon]

So Clever, in the US they did it this way, called Cash Back. You buy 1 million they give you 200,000 back.

[Kelonguni]

There is such a thing called valuation. I don't think bank can let you inflate loan by so much.

I doubt anyone wants to increase their loan quantum like this though...

[Ringo33]

There is such a thing called valuation. I don't think bank can let you inflate loan by so much.

I doubt anyone wants to increase their loan quantum like this though...

loan quantum is still the same if you are buying your first property

80% of $1m = 50% of $1.6m = $800k

[mosaic]

obviously you can t put this on the s and p. Seller decide to play punk you die jialat jialat

[kane]

The banks valuation can't be that far off, and I believe you need to declare if you have any discount kick backs from seller etc. If found out, they can call back the loan and the buyer's property can go up lorry.

[Autumnwinds]

Not possible, for a higher loan quantum, you'd have to be earning much higher for the bank to even grant you that amount.

[sunrise]

Assuming you have only $200K, you want to buy a $1m investment property, buy can only borrow $500k due to LTV.

Possible solution is that you get the seller to inflate the price to $1.6m so that you can borrow $800,000K from the bank. In return, you take up a short term loan to make round trip of $200K + $600K (short term loan) through the buyer and then you retire the loan.

Disadvantage is of course you need to pay higher stamp duty, but the advantage is that you could now own a property.

The above is just a simplified example for discussion sake.

You teach pple go holan.

[Ringo33]

Not possible, for a higher loan quantum, you'd have to be earning much higher for the bank to even grant you that amount.

Do you mean its possible if your income could qualify for the loan.

[Ringo33]

obviously you can t put this on the s and p. Seller decide to play punk you die jialat jialat

It could possibly be done between family members, partner relatives or friends.

Assuming your relative is selling and you are want to buy. So you orchestrate this round trip scheme to overcome the LTV restriction.

[wind30]

err... you know what LTV stand for?

I thought it is Loan To Valuation? Do they care what your selling price is?

[Condo Kaiser]

Definitely not possible... the valuer will never give you valuation of 1.6m when it is only worth 1m...

[sabian]

err... you know what LTV stand for?

I thought it is Loan To Valuation? Do they care what your selling price is?

Why you pichar his pipe dream?

He haven't say his relative is the property valuer...

[Adva181]

Not possible, if caveat shown 1.6m, tax man will go after the seller.

[Arcachon]

Not possible, if caveat shown 1.6m, tax man will go after the seller.

Why? Is it gov collect more Tax, the Tax man need to investigate, maybe they got noting better to do is it. If I am the Tax man I would say it the job of MAS not IRAS.

Or maybe you might say the gov will stop you from selling your property too high.

[Ringo33]

Not possible, if caveat shown 1.6m, tax man will go after the seller.

why would tax man go after seller when there is no such thing as a capital gain tax? The only tax is SSD, which only affect those who sold their property within 4 years from purchase date.

[Adva181]

Ya maybe it's MAS and not tax man.
You just sold ur property for "1.6m"
But your bank did not reflect the additional "600k".

My friend sold his condo x 2 and received 12m. The very moment the money is credited into his bank account, the next day Iras called to enquire about the money and transaction.

And I think the lawyers will not "help"
you to do so as they need to collect "800k" from you to the seller.

[Ringo33]

Ya maybe it's MAS and not tax man.
You just sold ur property for "1.6m"
But your bank did not reflect the additional "600k".

My friend sold his condo x 2 and received 12m. The very moment the money is credited into his bank account, the next day Iras called to enquire about the money and transaction.

And I think the lawyers will not "help"
you to do so as they need to collect "800k" from you to the seller.

In this case, MAS is only concern about the source of fund, they are not concern if you gamble it away in Casino or give it to your mistress.
So no issue on the round tripping if you ask me.

[Adva181]

I rem last time FEO used to do this, if the property cost is 1m and you only have 100k, they can mark up the selling price to 1.1m but you have to pay all the difference in SD n interest.
It is easier if its direct from developer, but if you do it vs resale owner, I doubts lawyers from both sides will help and bank normally do not give valuation 10% higher than previous sale unit.

I still rem many years ago when I buy my property in D1, the bank are reluctant to match the valuation unless I took a lower LTV.

Bank usually bias new launch against resale. Example Corals can sell 3000psf and bank will match the valuation but if you try to buy Carribean at 2500psf, your valuation sure rejected.

[Adva181]

In this case, MAS is only concern about the source of fund, they are not concern if you gamble it away in Casino or give it to your mistress.
So no issue on the round tripping if you ask me.

Maybe u try 1st den let us know if successful

And why last time only FEO doing it is because they are not listed.

[eng81157]

Assuming you have only $200K, you want to buy a $1m investment property, buy can only borrow $500k due to LTV.

Possible solution is that you get the seller to inflate the price to $1.6m so that you can borrow $800,000K from the bank. In return, you take up a short term loan to make round trip of $200K + $600K (short term loan) through the buyer and then you retire the loan.

Disadvantage is of course you need to pay higher stamp duty, but the advantage is that you could now own a property.

The above is just a simplified example for discussion sake.

wah piang, i hope u know that people have been convicted for such practices before.

[hopeful]

like that hamilton scott also roundtripping le. from 3000psf suddenly jump to 5000psf.

[Condo Kaiser]

I hope someone will propose this to me when buying my property.

1mm sell as 1.6mm...

after execute liao then i decide if i want to return him the 600k.....


I might even propose to him why not inflat to 3mm? then he no need downpayment at all and still can get 2mm back from the bank....

[Regulators]

After signing the contract, i will pretend there is no private agreement

I hope someone will propose this to me when buying my property.

1mm sell as 1.6mm...

after execute liao then i decide if i want to return him the 600k.....


I might even propose to him why not inflat to 3mm? then he no need downpayment at all and still can get 2mm back from the bank....

[astroboy8681]

like that hamilton scott also roundtripping le. from 3000psf suddenly jump to 5000psf.

goodness gracious 5000psf!!! for these whales they already do not need to round-trip....

but at this price i really start to wonder...

[Ringo33]

err... you know what LTV stand for?

I thought it is Loan To Valuation? Do they care what your selling price is?

Maybe you can write to your good friend at IRAS or MAS to ask them to look into this.

[Ringo33]

Someone just paid $2922psf for a 8902sqft landed property at Sentosa.
A whopping $26m for a 8902sqft?? And purchaser has got HDB address.

I am just wondering what is going on there.

[狮子王]

Ya maybe it's MAS and not tax man.
You just sold ur property for "1.6m"
But your bank did not reflect the additional "600k".

My friend sold his condo x 2 and received 12m. The very moment the money is credited into his bank account, the next day Iras called to enquire about the money and transaction.

And I think the lawyers will not "help"
you to do so as they need to collect "800k" from you to the seller.

I believe u, I kena called before also.

[hopeful]

Ya maybe it's MAS and not tax man.
You just sold ur property for "1.6m"
But your bank did not reflect the additional "600k".

My friend sold his condo x 2 and received 12m. The very moment the money is credited into his bank account, the next day Iras called to enquire about the money and transaction.
......

but...but....but...bank accounts is supposed to be private. MAS cannot suka2 any old how check people's bank acct le.

ooop, i just woke from my dream, USA, land of the free also have massive spying programs, what more authoritarian states like Singapore.
Remember: your vote is not a secret. 2016, vote PAP.

[hopeful]

Someone just paid $2922psf for a 8902sqft landed property at Sentosa.
A whopping $26m for a 8902sqft?? And purchaser has got HDB address.

I am just wondering what is going on there.

when you sign OTP, S&P, u use what address?
many foreigner used their property agent's HDB address for correspondence purposes.

are you really that interested?
you have squarefoot, you know address already. then pay money lor. no need to wonder anymore.